Credit card providers will be banned from charging fees if a customer exceeds their credit limit under new laws passed through federal parliament.
And banks and mortgage lenders must provide borrowers with a fact sheet from September to enable them to easily compare home loans.
The new laws are designed to help people reduce the level of fees and interest they are charged and lower the risk of being given unrealistic credit cards limits they may be unable to pay.
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From July 1, 2012 it will be tougher for borrowers to exceed the credit limit on their card and credit providers will be prohibited from charging fees if a customer does exceed their credit limit, unless the customer has opted to have a higher buffer where they can be charged fees.
It will be mandatory for credit providers to include in credit card application forms information about the annual percentage rate.
Credit providers are also prohibited from making unsolicited offers to increase credit card limits.
Under the new laws, when a person makes a payment on their credit card the repayment must go to the part of the balance of their credit card on which they are charged the highest interest rate, unless a consumer specifically elected to have a different payment arrangement.
From September 1, home loan lenders must display on their website, and make available on request, a key facts sheet about the products they offer so consumers can compare the cost of different home loans.
The government says the changes mean credit card providers face reduced revenue from charging higher fees if customers exceed their credit limit.
Before the bill passed the Senate on Monday night independent senator Nick Xenophon made a last-ditch attempt to save small home loan lenders from scrapping mortgage exit fees.
His failed amendment called for only the big banks to be banned from slapping mortgage exit fees, allowing small lenders to continue to impose mortgage exit fees.
Senator Xenophon told the Senate the government’s blanket ban on exit fees would have a detrimental impact on smaller lenders who he predicted would be pushed out of the market.
“Unlike the big four, who can offset costs … the smaller lenders need to be able to charge basic fees to keep them in the market,” he said.